The redemption of Charles Phillips

August 15, 2013, 11:24 AM UTC
New man: Infor CEO Charles Phillips, at his New York City headquarters.
Courtesy: Mackenzie Stroh

If there’s one thing Wall Street and Silicon Valley veterans remember about working with Charles Phillips, it’s his number: 1-800-MR-CHUCK. In the 1990s Phillips became one of the most plugged-in software analysts, writing prodigious reports for Morgan Stanley on the revolutions being wrought by the Internet. His expertise made him a star adviser to the most powerful leaders in business; his personal toll-free number passed from one CEO to another, scribbled on cocktail napkins and on business cards Phillips had printed. When Larry Ellison handpicked him to serve as president of Oracle in 2003, he used those connections to help close nearly 70 acquisitions, fueling the database giant’s record growth.

A lot has changed since Phillips’s wheeling and dealing days. After a series of embarrassing missteps—both personal and professional—Phillips has spent the past few years keeping an uncharacteristically low profile. He now runs Infor, a business-software provider. He left the Bay Area and resettled in New York City, and he says the turbulence of being tabloid fodder has died down. (More on that later.) Along the way, Chuck became Charles. And the 1-800 number? It stopped being passed around.

Not that Phillips was on sabbatical. Though Infor is a distant No. 3 enterprise-software supplier, behind Oracle and SAP, Phillips, 54, has quietly retooled the company’s software, brought in new management, and, not surprisingly, done some big deals. Now he’s ready to push Infor—and himself—back into the spotlight. Building on his previous incarnations as a captain in the U.S. Marine Corps and a mover and shaker on Wall Street and in Silicon Valley, Phillips says he’s finally molded himself into the kind of leader he always wanted to be.

Infor is the amalgamation of more than 40 software acquisitions brought together by private equity backers Golden Gate Capital and Summit Partners. Beginning in 2002, Golden Gate began assembling the company to provide the kind of nuts-and-bolts enterprise software that has proved one of the hottest sectors in tech. Under Phillips, the company has surged. It now sells its wares to more than 70,000 corporations, including clients Bausch & Lomb, Ferrari, and Heineken. Last year the profitable private company rang up $2.8 billion in revenue; a public offering is likely in the next year or two. “The last couple of years have been some of the most fun I’ve ever had,” says Phillips. Indeed, in a season of attempted second chances, Phillips has managed to thread his way through setbacks that would have sent most executives packing for obscurity.

Phillips doesn’t make it out to the Bay Area very often, but today he has flown in to meet me at San Francisco’s Four Seasons for the first of several interviews. We are seated at a table overlooking the city’s hectic Market Street, and Phillips, dressed in a crisp dark suit, is answering questions slowly and methodically. His voice is reedy and earnest, a slight Southern accent occasionally bobbing to the surface. He doesn’t smile much—until he begins showing off one of his company’s new products. “This is what enterprise software should look like!” he finally exclaims as he taps and swipes at an Infor social-networking tool for businesses, called Ming.le. Phillips has no handler or entourage in sight. He had all that at Oracle, but says he prefers to travel solo these days. When a waiter comes by to ask which color napkin we’d like, Phillips explains the protocol: A white napkin on dark pants is a major no-no because it leaves lint residue. “A lot of restaurants in New York do this,” he tells me.

Moving Infor’s headquarters to New York City from sleepy Alpharetta, Ga., after taking over in 2010 was one of Phillips’s most significant early decisions, helping, he says, revitalize the company’s image of itself. Step into Infor’s swank Manhattan offices and you can see why. A two-story-high wall of pulsing LCD screens provides the backdrop for bright red couches, metallic mesh curtains, and colorful oil-on-canvas artworks—many of them handpicked by the CEO himself. Conference rooms are named after jazz legends like Thelonious Monk and Dizzy Gillespie. (Phillips sits on the board of Jazz at Lincoln Center.) The office has no doors; Phillips and the rest of his management team sit together, tapping away on their laptops at a huge rectangular desk made of dark wood. It looks like a Bay Area startup that grew up and hired an upscale interior designer.

It took Phillips a long time to get comfortable, but at Infor he has surrounded himself with an executive team composed of the kind of people he says he’d “want to have dinner with.” Most of them—like COO Pam Murphy and co-presidents Duncan Angove and Stephan Scholl—are former colleagues from Oracle. They all started at Infor on the same day: Dec. 10, 2010. Phillips has taken other cues from his Oracle days: Just four months into the job, he pushed Infor’s board to shell out $2 billion to acquire Lawson Software, a competitor focused on serving the health care industry. “It probably surprised our investors that we wanted to make that big an acquisition that quickly,” says Phillips. He freely credits Ellison for his speed and “maniacal” focus on results. (Ellison declined to comment for this story.)

Infor is trying to carve out a niche for itself by going after smaller companies and divisions within large corporations, unlike rivals Oracle and SAP, which focus on software that powers huge industries from retail to telecommunications. For instance, rather than sell massive software bundles aimed at food production, Infor might try to design a product for a company that makes a specific candy. Phillips has also tried to differentiate Infor by focusing on design. He created an in-house agency of 60 designers to streamline the look and feel of the company’s hodgepodge of products. Tech firms routinely extol the virtues of good design, but in Infor’s case it’s vital: Giving products a measure of coherence has been one of Infor’s biggest trials.

There’s a lot Phillips has chosen not to replicate — especially when it comes to leadership style and corporate culture. “We wanted people to be motivated because they felt part of the machine and part of the club,” explains Phillips. “I didn’t want people to be motivated out of fear.” For example, Phillips says, he never shames employees in public, and personally emails workers to congratulate them on milestones and anniversaries. Those are not lessons he learned in Silicon Valley or on Wall Street, but on a middle-of-nowhere military base—Camp Lejeune.

He was born in 1959 in Little Rock, where his father was stationed. As a child, he moved from state to state and spent time abroad in Spain and Germany. “Every two years you’re the new kid, and you’re usually either the only or one of very few black families,” says Phillips. “So you learn how to read people pretty quickly.” When it came time to decide on his own career, the military seemed the obvious path. Phillips enrolled in the U.S. Air Force Academy in Colorado Springs and graduated with a computer science degree in 1981. (He later earned degrees in law and business as well.) When his eyesight worsened as a senior and dreams of becoming a pilot evaporated, he joined the Marines. He spent five years building IT systems as a captain at Camp Lejeune in Jacksonville, N.C. There, surrounded by 11 miles of desolate beaches—and about 38,000 other soldiers—Phillips picked up lessons he says helped him rehabilitate his career later on. “He’s very easy to get along with, and able to communicate with anyone,” says Marc Benioff, CEO of “That has to do with his military background.” Benjamin Jealous, president and CEO of the National Association for the Advancement of Colored People, and a friend, echoes the sentiment: “He comes to the table with a wider set of experiences than most people.”

Leaving the Marines was difficult. But Phillips’s wife, Karen, whom he had met in high school and married after college, was unhappy with base life. She had family in New York, so the two decided to relocate. Phillips had started interviewing for CIO jobs in the city when former Air Force Academy friends told him he should take his skills to Wall Street—and get a much bigger paycheck. Phillips quickly realized that most people investing in software knew little about technology. He started writing reports explaining relational databases and other cutting-edge technologies of the time. It was the early 1990s, and many companies were just starting to go online; CEOs needed a sage. “It was very easy to distinguish myself,” Phillips says. He made his way to Morgan Stanley in 1994. Along with co-analysts Mary Meeker and Frank Quattrone, he was part of an all-star team, and he made a name for himself. Phillips spent more than a decade on Wall Street, rubbing elbows with hedge funders, venture capitalists, private equity executives, and technology CEOs. He built a reputation for being one of the most aggressive, connected, and prolific analysts and was especially known for calling executives at odd hours. He also got his first taste of making big money.

Along the way, Phillips met another acutely ambitious leader—Larry Ellison. Around 2003, when Ellison heard Phillips was planning on taking a job with a New York-based private equity firm, he called and asked him to come work for Oracle instead. Phillips agreed. “Despite what people say about Larry, he’s very logical,” Phillips says. “You give him the right three facts, and he’ll come to the right decision every time. That’s why we hit it off.”

Within six months of starting at Oracle, Phillips was promoted to president, with 50,000 people under him. He became the most senior customer-facing executive at the company, flying around the world to establish or repair relationships. And at Ellison’s behest, he started making acquisitions. Phillips helped ink mega-buys like BEA and Siebel Systems, which Oracle snapped up for $8.5 billion and $5.8 billion, respectively. President Barack Obama personally asked him onto his Economic Recovery Advisory Board, and he also joined the boards of Viacom, the American Museum of Natural History, and New York Law School.

But while Phillips appeared at the top professionally, his personal life was falling apart. In January 2010 billboards went up in Atlanta, San Francisco, and New York City’s Times Square that featured Phillips and his former mistress embracing and smiling wildly. (Phillips has been married to his wife for 30 years; the girlfriend, who reportedly paid $50,000 for each ad, claimed she thought he was separated.) The Internet unkindly dubbed the scandal the “Billboard Mistress” episode, and Phillips issued a statement admitting an eight-year affair. “It was a difficult time, and we’re past it,” Phillips says now, visibly uncomfortable. “Nobody’s perfect, and you learn from your mistakes.”

That wasn’t his only fumble, though. In July of that year, Phillips spoke at Fortune’s Brainstorm Tech conference in Aspen; he said that Oracle would spend $70 billion on acquisitions over the following five years. The astronomical prediction quickly made headlines. The next morning, however, Oracle’s PR department issued its own statement, curtly retracting Phillips’s words. “Oracle does not have a five-year acquisition budget,” countered the release. “It is highly unlikely that we will spend anything approaching $70 billion in five years.”

According to Phillips, he’d asked for that retraction to be issued. But the damage to his reputation was done. By September rumors were circulating that he was out. A reorganization had given some of his global responsibilities to another executive. Then, shortly after ousted Hewlett-Packard CEO Mark Hurd joined Oracle as co-president, Phillips announced he was leaving to run Infor. Phillips says he still communicates with Ellison, although the two don’t have much to talk about these days. “If he ever needs me, he can call me,” Phillips notes. Still, by the time it was all over, he knew he would do things differently next time.

On a recent day in mid-June, Phillips is once again in the Bay Area—this time in East Palo Alto, overlooking the congested 101 freeway in Silicon Valley. During the past few months, Phillips has been to Manila, Seattle, Cleveland, and Maranello, Italy, to visit customers and employees. On this trip he’s meeting with the CEO of Flextronics, a longtime Infor customer. Since the company’s annual customer conference in April—when Phillips and his team unveiled improved products—the CEO says customers new and old have been reaching out to him. But getting the word out about Infor remains difficult. Cowen & Co. analyst Peter Goldmacher argues that Infor has historically been a second-tier player but that recent “radical” changes, such as new user interfaces, could help it win customers. Of course, like its competitors, Infor still has its share of old and clunky applications begging to be moved into the cloud. Updating them and getting them to work in unison will take time.

That’s why Phillips maintains he’s just getting started. He has a laundry list of acquisitions he’s waiting to make. He’s expanding his team, hiring even more designers. And though he’s a different person from his days as “Chuck,” he’s still capitalizing on and expanding his Rolodex. “He’s very open and curious,” says Philippe Dauman, CEO of Viacom. “When he runs into somebody that he thinks might be interesting to me, he will take the time to call.”

He says he’s learned a lot over the past 30 years, not to mention in the hurly-burly of his final months at Oracle. If there’s one thing that has stuck with him through the Marines, Wall Street, and Silicon Valley, it’s the importance of relationships. “He checks in with me all the time,” says Infor co-president Scholl. “He asks me, ‘When was the last time you took your wife and kids on holiday?’ He cares. He knows that there’s nothing more important.” Phillips clearly hasn’t lost his networking, negotiation, and closing skills. His toll-free line still rings his cellphone, in fact. And lately he’s been giving it out to customers again.

This story is from the September 2, 2013 issue of Fortune.

Read More

Artificial IntelligenceCryptocurrencyMetaverseCybersecurityTech Forward